Contracts are an untapped wealth of unique enterprise data, defining relationships and project outcomes. They touch every part of an organization’s value chain. From demand planning to compliance; from pricing to shipping and routing; from channel management to profitability—these strategic documents define what you buy, what you sell, and how you run.
Managed well, contracts help increase savings, revenue, and compliance. So, what does that mean for IT? As gatekeepers of enterprise technology, you play a pivotal role in the selection, implementation, and maintenance of key systems, especially enterprise-wide ones like CLM. Your input makes sure every technology used by the organization is well-governed, compliant, and provides maximum value.
With that in mind, let’s explore the key concepts that IT teams must understand when it comes to Contract Lifecycle Management (CLM). This blog is the first in a series that aims to help IT professionals familiarize themselves with contract management software and the dramatic impact it has on business.
What is CLM?
Many complex business challenges—customer onboarding, supply chain agility, commercial performance, enterprise risk—are rooted in contracts. Contract lifecycle management software dynamically analyzes contracts throughout their lifecycle — working with contracts from initiation through execution, performance, and their inevitable expiration or renewal. This helps businesses ensure the intent of every contract is fully realized.
Key CLM features include:
With robust clause and template libraries that encourage users to adhere to contracting standards and approved language.
- Search Capabilities
Robust, flexible search functionality that lets users view contextually relevant, mission-critical information quickly on demand without having to request it.
- Third-Party Collaboration
An adaptable, customizable web portal to facilitate collaboration with third parties.
- Post-signature Management
With the ability for clauses to be enforced on specific types of contracts and contract templates.
- Integration With Other Systems
With APIs to enable seamless, trusted data exchange with existing CRM, ERP, financial, and procurement systems.
- Reporting and Analytics
User-configurable dashboards with dynamic real-time data on deviations, expiries, renewal dates, and other critical metrics
What does this mean for IT?
IT’s focus on driving value from investments in technology dovetails very well with one of the core objectives of CLM: ensuring companies realize maximum value from each of the contracts they hold. That’s in addition to ensuring compliance and minimizing risk.
CLM unlocks valuable data typically hidden within an organization’s many, lengthy contract pages. It leads to smoother operations, avoiding disruptions and enabling smarter decision-making.
Because of this, making contracting processes a focus of digital transformation unlocks huge potential in terms of efficiency and revenue. CLM unlocks valuable data typically hidden within an organization’s many, lengthy contract pages. It leads to smoother operations, avoiding disruptions and enabling smarter decision-making.
Organizations are increasingly seeking CLM solutions that operate across the enterprise. CLM software will do just that, connecting contracting processes with operations like order fulfillment and billing to eliminate human error, reduce risk, and improve forecast accuracy.
Organizations today typically work with four systems of record that form their ‘backbone’: Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), Supply Chain Management (SCM), and Human Capital Management (HCM) systems.
An effective CLM platform will integrate seamlessly with existing technology stacks, and there is a clear benefit to connecting contract data with its surrounding business systems. It helps remove information silos, making contract processes faster and easier for every team along the value chain. These deeper partnerships help deliver a total experience as a “fifth system of record” CLM is a proven value-add for the business.
Integrations are proving to be even more valuable in the age of generative AI. With a CLM that integrates with ERP, SCM, CRM and HRM, IT departments can provide their organizations with enterprise data pools that fuel superior AI-driven insights.